General Conditions of Purchase 1
1. INTRODUCTION
1.1 These general conditions of Purchase 1 (“General
Conditions”) shall, unless otherwise agreed in writing, apply
to all purchases of goods and services (the “Work”) by Odfjell
Drilling AS or its Group members. The Work is an all including
concept for Supplier’s obligations. The Buyer under each
Agreement (as defined below) shall be Odfjell Drilling AS or
the relevant Group member specified in the applicable PO (as
defined below).
2. PURCHASE ORDER AND ORDER CONFIRMATION –
THE AGREEMENT
2.1 Supplier’s quotations (“Offer”) are non-binding upon
Buyer until accepted by a purchase order (“PO”), issued by
Buyer in compliance with these General Conditions which are
acknowledged by Supplier.
2.2 The PO, the Offer and these General Conditions constitute
the entire agreement (the “Agreement”) between the parties.
The Agreement is formed when the PO is issued and
acknowledged by the Supplier. On receipt of a PO from
Buyer, Supplier shall deliver a signed order confirmation in
writing if Supplier accepts to perform the Work in the PO. If
the Supplier fails to acknowledge the PO within five working
days of its issuance, the Supplier is deemed to have accepted
the PO and is obligated to commence the performance of the
Work immediately. These General Conditions shall supersede
any other terms and conditions submitted in connection with
the Offer, order confirmation or otherwise.
2.3 In the event of any conflict or discrepancy between the
provisions of the Agreement, the Agreement documents shall
be given the following priority unless otherwise specifically
stated in the Agreement:
1. The PO and its appendices
2. These General Conditions
3. The Offer and its appendices
2.4. The written and numbered PO shall specify type of
goods/services, quantity, place and time of delivery and total
price. If Supplier discovers any errors or discrepancies in the
PO, Supplier shall notify Buyer and initiate corrective actions.
Supplier shall refer to the PO number in all correspondence
with Buyer and when invoicing.
2.5 Supplier shall not commence the Work without a PO. If an
emergency occurs, an e-mail or requisition may be issued as
an order to proceed solely by Buyer’s procurement
department, and shall be accepted by Supplier prior to receipt
of PO.
3. SUPPLIER’S OBLIGATIONS
3.1 The Work shall be in compliance with the Agreement, any
drawings, specifications or instructions given by the Buyer in
accordance with the provisions of the Agreement, and
generally accepted professional standards as well as any
relevant classification rules applicable to Buyer’s use of the
Work. The Work shall be in compliance with any applicable
laws and regulations, including any sanction, anti-corruption
and data protection laws. Supplier shall obtain and maintain
approvals and permissions which are necessary for fulfilling
the Agreement.
3.2 The Supplier shall immediately notify the Buyer of any
indistinctness, errors or omissions in drawings, specifications
and instructions given by the Buyer. If the Supplier fails to
immediately notify the Buyer of any indistinctness, error or
omission which the Supplier discovered or ought to have
discovered, the Supplier shall not be entitled to any
adjustment in the purchase price and/or delivery time due to
the indistinctness, error or omission, and the Supplier shall
cover any direct costs incurred by the Buyer due to this not
being notified.
3.3 Supplier shall satisfy all relevant obligations for quality,
health, safety and environment (QHSE). The Buyer has
established an environmental management system according
to ISO 14001, and a quality management system according
to ISO 9001. The Supplier is expected to show a conscious
attitude to environmental and quality management and for
arranging continuous improvements in its operations, as well
as notifying the Buyer of any initiatives taken in this
connection. The Supplier shall, in the same way as the Buyer,
ensure
compliance
with
recommendations
from
certifying/auditing parties.
3.4 Buyer encourages the Supplier to continuously evaluate,
suggest and initiate a mutual dialogue in order to identify
possible cost reduction measures to the Buyer.
3.4 In the event of any testing activity in relation to the
Work, whether FAT (final acceptance test) or otherwise, the
Buyer shall be given a five working days’ notice and the
opportunity to participate in such testing.
4. DELIVERY
4.1 Goods shall be delivered properly packed and marked, at
the agreed place and time of delivery. All deliveries must be
suitably packed for the final destination being an offshore
location with all appropriate certification and MSDS (material
safety data sheet) and/or D.G (dangerous goods) note
supplied. All goods delivered to or within the EU, shall have
the proper CE-marking at the time of delivery. Any heavy
items shall be delivered so that they can be offloaded safely
with a forklift. Awkward/deviating deliveries shall be notified
Buyer in advance.
4.2 Unless otherwise stated in the Agreement, the Work shall
be delivered DDP at Buyer’s site in accordance with
INCOTERMS latest version. Supplier shall submit all required
documents for export and import of goods to place of
delivery.
4.3 Applicable documentation shall always be part of the
delivery. All documentation connected to delivery shall be
filed by Supplier and be available to Buyer for at least 10
years after delivery.
4.4 Title to Work shall pass to Buyer progressively as it is
manufactured or parts of the Work are identified, marked or
separated for the purpose of the Agreement or when the
Work is paid for by Buyer if this occurs earlier.
4.5 Goods shall be delivered free from any liens, claims,
attachments or other encumbrances, and Supplier hereby
waives and renounces any right to retention or detention that
he has or may have in the Work. Supplier shall indemnify the
Buyer in respect of the Supplier’s non-compliance with this
article.
5. PRICE AND PAYMENT
5.1 The price is fixed and firm and is not subject to
escalation. All prices shall be in the currency stated in the PO.
5.2 Supplier shall invoice on delivery of goods or otherwise at
completion of the Work or agreed milestones. Invoices must
be addressed to the buying company, refer to the Agreement
and be clearly marked according to the instructions in the PO.
5.3 Buyer shall pay 45 calendar days after receipt of a correct
and complete invoice. Buyer has the right to return incorrect
or incomplete invoices which are not in accordance with
article 5.2. This includes insufficiently documented invoices
and/or deliveries as set out in article 4.2. In such case the
period of credit does not start to run before Buyer has
received a correct invoice and/or the required documentation.
Buyer’s obligation to pay extends only to amounts which have
been properly invoiced and which are not disputed by Buyer.
Buyer can make deductions and set-offs from invoiced
amounts for advance payments, amounts Supplier has
credited Buyer, parts of invoiced amounts which Buyer has
notified are inadequately documented or in any other way
disputed and amounts Buyer is otherwise permitted to deduct
or set-off under this Agreement (including under article 12.2
or article 16.5 of these General Conditions). Payment of an
invoice does not entail acceptance of what was delivered,
price or that Buyer waives any rights according to the
Agreement.
Page 1 of 4
General Conditions of Purchase 1
5.4 Invoices which are submitted later than 90 calendar days
after the delivery or completion of the Work shall not be
payable. The parties acknowledge and agree that this article
5.4 is fair and reasonable in all the circumstances, including
that the Buyer’s ability to pass on costs incurred under this
Agreement may be limited by provisions similar to this article
5.4 contained in contracts between the Buyer and its
customers.
5.5 Unless expressly stated otherwise in the PO, all amounts
payable by Buyer under this Agreement are inclusive of all
taxes and duties (existing or new and including any value
added and sales taxes) payable in respect of the Work.
Supplier shall be solely responsible for all taxes, duties,
national insurance or other withholdings or contributions
which are or may be payable out of, or as a result of the
receipt of any amount paid or payable in respect of, the
Work. Supplier shall indemnify Buyer in respect of all such
taxes, national insurance or other withholdings or
contributions.
5.6 Without limiting article 5.5, Buyer is entitled to withhold
and remit taxes from payments due to the Supplier to the
extent that such withholding and remittance is required by
applicable laws or regulations. The Buyer shall remit to the
appropriate authorities all amounts withheld by it and provide
documentation of same to the Supplier.
6. VARIATIONS
6.1 Buyer is entitled to make any variations to the Work, or
part thereof. Such variations may include increase or
reduction of scope of work, character, quality, nature or
design, as well as execution and change of delivery time,
provided that such variations are within what the parties
could reasonably expect when entering into the Agreement.
6.2 The variation shall be formalized by Buyer’s issuance of a
written variation order (VO). Supplier’s obligations under this
Agreement apply to all variations to the Work. The price in
the VO shall reflect the price level of the original PO.
6.3 If Buyer instructs Supplier to perform work which in the
opinion of the Supplier is not part of its obligations under the
Agreement and has an effect on price and/or delivery time,
the Supplier shall submit a variation order request (VOR) to
Buyer. A VOR shall be clearly identified as such, and include
the reasons for issuing the request, as well as the effects of
the variation. The Buyer shall respond to a VOR by issuing a
VO or a disputed VO (DVO). If Supplier does not issue a VOR
without undue delay, Supplier has thereby confirmed that the
instruction does not increase the price or change the delivery
time of the Work.
6.4 Supplier is obliged to implement a VO or DVO without
undue delay even if the parties do not agree on the effect on
price and delivery time. If the parties disagree on the
VO/DVO’s impact on price, Buyer shall pay the amounts
which are not disputed, as a provisional settlement. A
VO/DVO which is due to Supplier shall not result in a change
of price or delivery time in favour of the Supplier.
6.5 Any disputes regarding VOs/DVOs shall be handled in
accordance with article 21. If the Supplier has not initiated
legal proceedings within 6 months after the issuance of a
VO/DVO, the amount stated in the VO/DVO shall be final and
binding upon the parties.
7. SUSPENSION
7.1 Buyer can at any time notify Supplier that the Work shall
be suspended temporarily, in whole or in part. The
notification shall specify the part of Work being suspended,
the effective date of the suspension and if possible the
duration of the suspension. The Supplier shall resume the
Work as soon as Buyer has given Supplier notification of this.
7.2 Buyer shall compensate Supplier’s direct and documented
costs relating to demobilisation, remobilisation. Storage and
such other costs as pre-agreed with Buyer.
8. CANCELLATION
8.1 Buyer may, at its sole discretion, cancel the Agreement or
part thereof by giving a written notification to Supplier. The
Supplier shall cease all Work as specified in the notice, and
use its best efforts to reduce costs related to the cancellation.
8.2 Buyer shall compensate Supplier for the documented
costs for the part of the Work performed and necessary direct
cost, relating to demobilization and such other cost as preagreed with Buyer.
9. GUARANTEE LIABILITY AND DEFECTS
9.1 Supplier guarantees that the Work shall be performed
according to the Agreement. Supplier also guarantees that
the Work shall comply with applicable laws and regulations,
current technical standards and will be in conformity with the
PO, and that any design performed by Supplier is fit for the
intended purpose. Supplier further guarantees that materials
and equipment used are new and of high quality. A condition
covered by the guarantee shall be rectified by Supplier free of
charge within reasonable time.
9.2 The guarantee period expires 24 months after the Work
has been taken into use for its intended purpose, but not
later than 36 months after delivery. The guarantee period for
services is 24 months from the time the services are
rendered.
9.3 Should the Work have any defects, Supplier shall
immediately, or at such time as otherwise instructed by
Buyer, carry out the necessary rectification work at no cost
for Buyer. If Supplier does not remedy a defect within
reasonable time, Buyer, or such third party as the Buyer may
instruct, after having notified Supplier, can carry out the
necessary rectification for account and risk of Supplier. In
addition, Buyer may claim compensation and/or damages for
breach of this Agreement and/or otherwise according to
applicable law.
9.4 If Supplier has performed rectification work/made a
redelivery during the guarantee period, a new 24 months
guarantee period shall apply for the rectified/redelivered
parts of the Work from the date of completion of the
rectification work.
9.5 If a defect in the Work implies that there has been a
material breach of this Agreement, the Buyer may terminate
the agreement and claim compensation in accordance with
article 16.
10. RETURN OF GOODS
10.1 Unused, incorrectly delivered or standard goods made
for stock, in new, resalable condition may be returned by
Buyer for credit provided written request is issued by Buyer
and received by Supplier within one year after the purchase
date.
10.2 Requests for return of goods must show original PO
number, description of goods and date of purchase. The
credit given shall be based on the original price and will be
issued following Supplier’s receipt of the goods.
11. INDEMNIFICATION
11.1 Each of the parties shall indemnify the other party in
respect of personal injury to or loss of human life among
personnel of the indemnifying party’s Group and loss of or
damage to property of the indemnifying party’s Group, and
which arises in connection with the Work.
11.2 Each party shall also indemnify the other party in
respect of damage and loss inflicted by its Group on a third
party which arises in connection with the Work.
11.3 The Supplier shall indemnify Buyer in respect of any
infringement or alleged infringement of third party patent
rights or other intellectual property rights relating to the
Work.
Page 2 of 4
General Conditions of Purchase 1
11.4 Neither party shall be liable to the other for indirect or
consequential losses which arises in connection with the
Work.
11.5 The indemnity in article 11.1 shall apply irrespective of
the cause of the relevant injury, loss or damage and even
where the same is caused by negligence or breach of duty
(statutory, contractual or otherwise) of the indemnified party
or a member of its Group.
12. DELAYS
12.1 If Supplier has reason to believe that the progress in
delivering the Work is deviating from the timeframe
contemplated by the Agreement, it shall immediately notify
Buyer in writing. Supplier shall without undue delay inform
Buyer about the cause of the delay, estimated duration of the
delay, assumed impact on the progress plan and proposed
remedial actions to recover or limit the delay. Such
notification does not exempt Supplier from its obligations in
accordance with the PO. If Supplier’s remedial actions are
inadequate, Buyer may instruct Supplier to initiate extra
remedial actions considered necessary. The costs of all
remedial actions shall be borne by Supplier.
12.2 In case of delay by Supplier in delivering all or part of
the Work, Buyer is entitled to liquidated damages of 0.5% of
the price per calendar day commenced until delivery is
effected in accordance with this Agreement, limited to 15 %
of the PO price. Buyer has the right to set off the liquidated
damages against amounts owed by it under this Agreement
or any claim which the Supplier may have against Buyer.
13. TERMINATION
13.1 Buyer is entitled, by written notice to Supplier, to
terminate the Agreement with immediate effect if Supplier
commits a material breach of the Agreement. The following is
a non-exhaustive list of agreed material breaches of the
Agreement: Supplier initiates liquidation or otherwise
becomes Insolvent; Supplier introduces closure; Supplier
suspends payments; material defect in the Work; violation of
article 15; stoppage of Work; Buyer becomes (or it is evident
Buyer will become) entitled to claim maximum liquidated
damages; or Supplier does not fulfil its obligations in respect
of insurance.
13.2 Termination of this Agreement shall be without prejudice
to Buyer’s rights in respect of any prior breach of the
Agreement by Supplier. Without limitation, Buyer may claim
compensation for any claims, costs, damages and losses
incurred by Buyer due to the material breach of Agreement
by Supplier.
13.3 Any article in these General Conditions which may also
serve its purpose after the termination of the Agreement,
shall survive such termination.
14. FORCE MAJEURE
14.1 If events occur which (i) the parties could not
reasonably foresee when entering into the Agreement, (ii) lie
outside their control, (iii) have effects the parties cannot
reasonably avoid or overcome, and (iv) which prevents
delivery or completion of the Work, the parties are
temporarily released from fulfilling the Agreement.
14.2 The party who wishes to plead force majeure must
notify the other party in writing without undue delay.
Moreover, written notification must be given when the force
majeure situation has ceased and the parties’ obligations
according to the Agreement shall resume.
14.3 The party whose performance under this Agreement is
unaffected by the force majeure event shall have a right to
terminate the Agreement in writing, with immediate effect, if
the force majeure situation lasts more than 60 calendar days.
The parties bear their own costs due to force majeure.
15. ANTI CORRUPTION AND BUSINESS ETICHS
15.1 Each of the Parties represents and warrants that it will
not, whether in Norway or abroad, do or omit to do anything
in defiance of the Norwegian criminal act (Nw.: straffeloven),
the UK Bribery Act 2010, the US Foreign Corruption Practices
Act and/or any other applicable anti-bribery and corruption
laws of any country in which the Party conducts business.
Any breach of the obligations in this article 15 shall be
regarded as a material breach of the Agreement.
15.2 The Supplier further undertakes to comply at all times
with the code of business conduct of the Odfjell Drilling Group
(as it may be revised and updated from time to time), the
current version of which can be downloaded from
www.odfjelldrilling.com.
16. MINIMUM WAGE & WORKING CONDITIONS
16.1 The Supplier shall ensure that employees within
Supplier’s own organization and employees of any of the
Supplier’s sub-contractors or sub-suppliers do not have lesser
wage and working conditions than what is set out in
applicable law and regulation. This only applies to employees
who directly contribute to fulfilling the Agreement.
16.2 All agreements which are entered into by the Supplier
with the Supplier’s sub-contractors and sub-suppliers to
perform Work under the Agreement shall contain equivalent
provisions to this article 16.
16.3 In the event that the Supplier does not comply with the
obligations stipulated in this article 16, the Buyer may
withhold payment until the breach has been rectified. The
Supplier shall indemnify Buyer in respect of any noncompliance by the Buyer with this article 16 and Buyer may
set-off the amount to which it is entitled under such
indemnity against any payment due to the Supplier. The
Supplier shall, upon request, submit documentary evidence of
the wage and working conditions which have been applied.
This requirement is also applicable to the Supplier’s subcontractors and sub-suppliers and the Supplier shall procure
their compliance with the same.
17. AUDIT
17.1 Buyer has the right to audit the Supplier, sub-suppliers
and sub-contractors upon three -3- weeks written notice. This
right applies to all matters concerning the Agreement. Buyer
shall have access to all relevant documentation connected
with the Agreement. Supplier shall procure that its subsuppliers and sub-contractors participate in such audit and
comply with this article 17 as if they were parties to this
Agreement.
17.2 If the audit reveals non-conformities, Supplier shall
correct these accordingly. Buyer has a right to perform an
audit for up to two years after the expiry of the year in which
the Work was delivered.
18. INSURANCE
18.1 Supplier shall at its own expense provide and maintain
insurance policies covering the liability possibly incurred by it
as a result of the Agreement. The insurances shall not cease
before delivery of the Work has taken place. If requested,
Supplier shall submit original insurance certificates to Buyer.
19. CONFIDENTIALITY
19.1 All information which the parties exchange shall be kept
confidential. Each of the parties may use or transfer
information to others to the extent necessary for fulfilling the
Agreement. The parties shall not publish or advertise
information in connection with the Agreement without the
other party’s written approval.
19.2 Notwithstanding article 19.1, Buyer (and its Group
members) shall be permitted to disclose information of the
kind referred to in article 19.1 as required by applicable law
or regulation, stock exchange rules, for the purposes of
obtaining finance or in connection with any relevant corporate
or business asset transaction.
20. ASSIGNMENT AND SUB-CONTRACTING
20.1 Buyer may transfer the Agreement, or any of its rights
or obligation thereunder, to a third party.
Page 3 of 4
General Conditions of Purchase 1
20.2 Supplier may not transfer the Agreement or any its
rights or obligations thereunder to a third party without the
prior written consent of the Buyer.
20.3 Supplier may not sub-contract any part of the Work
without the prior written consent of the Buyer.
Notwithstanding any such approved sub-contracting, Supplier
shall remain fully responsible for the Work.
21. CHOICE OF LAW AND DISPUTES
21.1 This Agreement and any non-contractual obligations
arising in connection with it are governed by and construed in
accordance
with
English
law.
21.2 Subject to article 21.4, the English courts have exclusive
jurisdiction to determine any dispute arising in connection
with this Agreement, including disputes relating to any noncontractual
obligations.
21.3 Each party irrevocably waives any objection which it
may now or later have to proceedings being brought in the
English courts (on the grounds that the English courts are not
a
convenient
forum
or
otherwise).
21.4 Nothing in this Agreement shall prevent a party from
applying to the courts of any other country for injunctive or
other interim relief.
21.5 Until a dispute is settled, Supplier shall continue to fulfil
this Agreement.
22. MISCELLANEOUS
winding up of such party; such party is the subject of a
notice of intention to appoint an administrator, is the
subject of a notice of appointment of an administrator, is
the subject of an administration application, becomes
subject to an administration order, or has an
administrator appointed over it; a receiver or
administrative receiver is appointed over all or any of
such party’s undertaking property or assets; any
bankruptcy petition is presented or a bankruptcy order is
made against such party; an application is made for a
debt relief order, or a debt relief order is made in
relation to such party; such other party is dissolved or
otherwise ceases to exist; or the equivalent of any of the
events described in the foregoing paragraphs of this
definition occurs in relation to such party under the laws
of any jurisdiction.
22.2 (Severance) The illegality, invalidity or unenforceability
of any provision of this Agreement under any law of any
jurisdiction shall not affect or impair the legality, validity or
enforceability of the rest of this Agreement, nor the legality,
validity or enforceability of that provision under the law of
any other jurisdiction. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any law of
any jurisdiction, that provision shall if possible apply in that
jurisdiction with whatever modification or deletion is
necessary so as best to give effect to the intention of the
parties as recorded in this Agreement.
22.3 (Amendments) Without prejudice to the ability of the
parties to make variations to the Work (or part thereof) in
accordance with article 6, no variation of the Agreement shall
be effective unless it is in writing and signed by or on behalf
of each party.
22.1 (Definitions) In this Agreement:
(a)
(b)
“Group” means in respect of a party, itself, its holding
company, its subsidiaries, and the subsidiaries of that
holding company, where terms “holding company” and
“subsidiary” have the meanings given in the UK
Companies Act 2006. In the case of Buyer, companies
shall be deemed to be subsidiaries for the purposes of
this definition if the shareholding of a Group company
therein is forty percent or greater;
“indemnify” means to indemnify the other party on
demand and on an after tax basis from and against all
claims,
demands,
actions,
awards,
judgments,
settlements, costs, expenses, liabilities, damages and
losses
(including
all
interest,
fines,
penalties,
management time and legal and other professional costs
and expenses) incurred by the other party (or any of its
subsidiaries or associated companies, employees,
officers, agents and contractors) as a result of or in
connection with the matter to which the indemnity
relates; and
(c) “insolvent” means in respect of a party that: the party
becomes unable to pay its debts within the meaning of
section 123 of the UK Insolvency Act 1986; the party
ceases or threatens to cease to carry on the whole or a
substantial part of its business; any distress or execution
is levied upon such party’s property or assets; such
party shall make or offer to make any voluntary
arrangement or composition with its creditors; any
resolution to wind up such party (other than for the
purpose of a bona fide reconstruction or amalgamation
without insolvency) shall be passed, any petition to wind
up such party shall be presented and not withdrawn or
dismissed within seven days or an order is made for the
22.4 (Waiver) A failure or delay in exercising any right or
remedy under the Agreement shall not constitute a waiver of
that right or remedy. A single or partial exercise of any right
or remedy shall not prevent the further exercise of that right
or remedy. A waiver of a breach of the Agreement shall not
constitute a waiver of any other breach.
22.5 (Cumulative Rights) The rights and remedies of Buyer
expressly conferred by the Agreement are cumulative and
additional to any other rights or remedies it may have.
22.6 (Relationship of parties) Nothing in the Agreement is
intended to or shall operate to create a partnership or joint
venture of any kind between the parties. No party shall have
the authority to bind the other party or to contract in the
name of, or create a liability against, the other party in any
way or for any purpose.
22.7 (Set-off) Save as otherwise provided in this Agreement,
all amounts payable under or in connection with this
Agreement shall be paid in full without set-off, deduction or
withholding.
22.8 (Third Party Rights) The parties do not intend any third
party to have the right to enforce any provision of this
Agreement under the UK Contracts (Rights of Third Parties)
Act.
Page 4 of 4